domingo, 10 de agosto de 2008

Australia, Impacto de la Influenza Equina

RESULTS FOR ANNOUNCEMENT TO THE MARKETTABCORP PRELIMINARY FINAL REPORTFOR FULL YEAR ENDED 30 JUNE 2008

In accordance with the ASX Listing Rules 4.3A, the following information in respect of theyear ended 30 June 2008 is transmitted for lodgement:1. Media Release; and2. Preliminary Final Report (Appendix 4E).The Directors have declared a special dividend of 47 cents per share fully franked at thecompany tax rate of 30% to be paid on 22 September 2008.

The dividend record date for the purpose of entitlement to the special dividend will be18 August 2008. The ex-dividend date is 12 August 2008.

The Directors decided to continue the operation of the Company's Dividend ReinvestmentPlan (DRP) for the special dividend. To participate in the DRP at the special dividend, DRPelections must be received by Tabcorp's share registry (Link Market Services Limited) by theend of the record date. The price at which shares are issued under the DRP is the dailyvolume weighted average market price of Tabcorp shares sold in the ordinary course oftrading on the Australian Securities Exchange over a period of ten business days beginningon the second business day after the dividend record date. Currently, there is no discountapplicable on the price of shares issued under the DRP. Information regarding the DRP canbe found on the company's website at www.tabcorp.com.au.

Group performance overviewTabcorp Holdings Limited today announced a normalised net profit after tax (before non-recurring items) of $516.9 million for the year to 30 June 2008. Normalised earnings pershare were 98.5 cents. Normalised earnings were in line with the 2007 result andconsistent with guidance given at the beginning of the year, notwithstanding the effect ofequine influenza.

Reported net loss after tax was ($164.6 million), reflecting three significant balance sheetadjustments:·A charge of $487.7 million against the value of the Victorian wagering and gaminglicences, reflecting the Victorian Government's view that Tabcorp is not entitled toa licence fee refund.·A write down of $194 million in the carrying value of the company's wageringbusiness, reflecting the challenges faced by this business in recent years and thechanges in the competitive environment.·A write off of $25.8 million after tax against assets that will be made redundant aspart of the expansion of Star City casino.

These charges were partially offset by a positive win rate in the International RebateBusiness in the Casinos Division. The above theoretical win rate contributed $26 millionafter tax to reported earnings.

Taking into consideration the underlying performance of the business, the Board hasdeclared a special dividend of 47 cents. This special dividend is a substitute for the finaldividend that will not be declared by the company as a result of the additional charges tothe 2008 reported earnings. The special dividend will be fully franked and payable on 22September 2008 to shareholders registered on the books at 18 August 2008.1Chairman John Story said: "The operational performance of the Group was in line withthat of the previous year. In light of the challenges that it has faced, including smokingbans, higher gaming taxes and the outbreak of equine influenza, this was a creditableoutcome.

"The decisions taken by the Victorian Government in April 2008 have a material impacton the Group. As a consequence, the Board has determined to take a provision for thevalue of the licence refund. We believe this to be prudent, but it should in no way be seenas a change in our strong resolve to pursue our legal entitlement to the refund," Mr Storysaid.

"We have also reviewed the carrying value of our wagering business. The performance ofthis business has been impacted over several years by the challenges of integrating theVictorian and New South Wales operations, the split picture dispute and equineinfluenza. Whilst management has responded strongly to those challenges in the lastyear and delivered a positive result, we cannot ignore their cumulative effect on thebusiness. Moreover, we must take into account the changing competitive environmentand the uncertainty in the regulatory regime. Tabcorp is adapting to the changingcompetitive conditions aggressively, having regard to the interests of the racing industryon which the business is based. Whilst we have every confidence in the future for thewagering business, we consider that an adjustment to its carrying value is called for.

"Finally, the proposed expansion of Star City will render redundant certain elements ofthe property, the value of which is still carried on the balance sheet. We have writtenthese items off as part of our overall review of the balance sheet," he said.

"The combined impact of these adjustments on the reported earnings is substantial. Wehave, however, considered the dividend payment in the context of normalised earnings,and have resolved to maintain the annual dividend at 94 cents per share. And while weare conscious of global uncertainty and a softening economy, based on the currentoutlook for the company we expect that this payment per share can be maintained," MrStory said.

Division performanceIn the 2008 financial year, each of Tabcorp's three divisions delivered good expensecontrol, with aggregate expenses up 0.5%. Revenue performance across the divisionswas mixed, with aggregate revenues up 0.9%.

Measured in normalised Earnings Before Interest and Tax (EBIT), the divisional resultswere:·Casinos: EBIT $368.8 million, down 4.5 per cent. The four casino propertiesexperienced tougher trading conditions in the second half, in addition to theimpact of smoking bans in New South Wales. These factors impacted onrevenues from Electronic Gaming Machines and the Main Gaming Floor withrevenues down 2.4% and 1.2% respectively.At the premium end, revenues from the domestic Private Gaming Roomsincreased by 8.7%, assisted by above average win rates. Revenues from theInternational Rebate Business were down 28.3% on the previous year, driven by2the absence of a few large players. An above theoretical win rate of 1.8% added$26 million to the company's reported profit after tax.

The Board has approved an investment of $475 million to expand Star Citycasino. This investment follows a new agreement on exclusivity and productconcessions with the New South Wales State Government.

The expansion will turn Star City into the leading entertainment destination in NewSouth Wales. The project includes a new five-star hotel tower, a reorientation ofthe property towards Sydney harbour, a significant expansion of the number ofrestaurants, bars and retail shops, and an expansion of the Main Gaming Floor.The Star City expansion project is expected to commence in early 2009 and becomplete in 2011.·Wagering: EBIT $264.4 million, up 4.2%. The wagering result is positive in lightof the equine influenza outbreak, which impacted EBIT by approximately $17million. Racing turnover recovered gradually during the second half after racingresumed in December 2007. Sportsbetting continued to perform well withrevenues up 15.9% on the previous year.The equine influenza outbreak had a significant impact on the Australian racingindustry. In New South Wales, thoroughbred and harness racing stopped for morethan three months, with the government providing financial support to participants.Victoria continued to deliver a full racing program, which helped wagering acrossthe nation to continue. The continued racing program, together with additionalfinancial support from Tabcorp and an increase in the industry's share of gamingearnings offset the impact of equine influenza in Victoria. Distributions to the NewSouth Wales racing industry fell by 4.4% to $214.0 million, while distributions tothe Victorian racing industry increased to a record $300.3 million.·Gaming: EBIT $261.4 million, down 0.3%. The Gaming division increasedrevenues by 4.8% despite the introduction of full indoor smoking bans in Victoria.Gaming market share in Victoria continued to increase, averaging 52% in thesecond half. Revenue growth did not translate into higher earnings as a result ofthe higher Gaming Machine Levy imposed by the Victorian Government.Following New South Wales Government approval, the division commenced therollout of its Keno product into New South Wales hotels. As at the end of June2008, 170 hotels offered the Keno product and this is expected to expand to 600by the end of the 2009 financial year.

Chief Executive Officer Elmer Funke Kupper said that the company had responded wellto the equine influenza outbreak and a softening in the economic environment in thesecond half.

"When equine influenza hit the racing industry, we adjusted our operating plans. Thisallowed us to compensate for the loss of revenues and deliver on our original guidancethat the 2008 results should be similar to 2007. This outcome is a great credit to theresilience of our wagering business and our racing industry partners.3"Our Gaming business did well to accommodate both the higher Victorian gaming levyand the expansion of Victorian smoking bans. The Casinos Division has, however,struggled in the face of smoking bans in New South Wales, competition in Queenslandand a deteriorating economic environment.

"2008 was operationally a much better year for the company. We simplified the business,increased the focus on each of the operating divisions, reduced the size of our headoffice and exited our China Keno businesses. Following significant issues in the previousyear, our technology performance improved significantly, particularly during SpringCarnival in Victoria and Autumn Carnival in New South Wales.

"Our reported earnings were affected by a number of write downs. We have now dealtwith the major operational and balance sheet issues.

"During the year, we started a number of new initiatives that target higher growth. Weexpanded our Keno business in New South Wales, announced entry by our wageringbusiness into the Northern Territory market, and approved the expansion of Star Citycasino. These investments will put the company in a better position over the comingyears," he said.

Accounting treatment for Victorian wagering and gaming licencesIn April 2008, the Victorian Government announced that it had decided to move to a newstructure for Victoria's gambling industry beyond 2012. The Government also stated ithad formed the view that Tabcorp was not entitled to compensation under the GamblingRegulation Act 2003. Tabcorp believes that it has a right to a payment, which it estimatesto be $687 million. Legislation in relation to the announcement is yet to be enacted.

The obligation on the Victorian Government to make the payment to Tabcorp came intoexistence when it floated the company. The right to the payment is in legislation and hasbeen acknowledged in various publicly available Government documents since 1994,including the annual state budget papers. Tabcorp has recorded the licences as anintangible asset on its balance sheet at their original cost of $597 million, and as a resultof the payment obligation, no amortisation has been recorded since 1994 given thepayment was expected to be not less than cost.

Tabcorp intends to pursue all of its rights and to take all appropriate action in respect ofthe payment. However, the Government's stated position creates uncertainty in respectof the payment, and therefore, the company has taken a provision for the present valueof the payment and will amortise the remaining value of the licences over the next fouryears.

This is reflected in Tabcorp's reported earnings as follows:·The company incurred a charge in its 2008 reported earnings of $487.7 million·Until expiry of the licences in August 2012, the company will incur an annuallicence amortisation charge of $26.5 million.

4Tabcorp outlookMr Funke Kupper said that the company is well placed to face a tougher economicenvironment. "In the second half, we have seen that higher interest rates and higherliving expenses are starting to affect discretionary spending, particularly in our casinosbusiness.

"The operational improvements we put in place during the 2008 financial year put us in astronger position to weather an economic downturn. On the expense side, we willcontinue to manage expense growth within CPI. On the revenue side, a number ofchallenges that impacted us, including smoking bans, higher gaming taxes and equineinfluenza are now largely behind us. This allows us to focus our energy on our customersand on improving our competitive position.

"In 2008, we distributed a dividend of 94 cents per share to shareholders. Our currentprojections indicate that this payment per share can be maintained.

Mr Funke Kupper confirmed that Tabcorp will increase investment in its casinos andwagering divisions. "In 2009, we will increase our capital investment program, particularlyin the casinos division. In the medium term, these investments are critical so we can giveour customers the best possible gambling entertainment experience and secure therevenue performance of our businesses."